Optimizing Factory Performance: Cost Effective Ways to Achieve Significant and Sustainable Improvement

Citation

Narasimhan, K. (2011), "Optimizing Factory Performance: Cost Effective Ways to Achieve Significant and Sustainable Improvement", The TQM Journal, Vol. 23 No. 5, pp. 578-579. https://doi.org/10.1108/17542731111157662

In this highly competitive and global market, it has become imperative for manufacturers to ensure that they produce the right products and deliver them at the right time to the right customers whilst keeping the manufacturing and logistics cost down. Organizations have pursued various approaches such as TQM, Lean Manufacturing, Six Sigma, Business Process/reengineering, Supply Chain Management, Theory of Constraints, etc. However, these methods do not seem to have met with complete success and a holistic approach would be necessary to ensure optimized performance in the long run. Dr Ignizio describes, discusses and illustrates such a holistic approach in this book.

James Ignizio is founder and principal of FactoryAnalyst.com, a consulting practice, who has presented short courses and seminars on manufacturing, operations research, and industrial engineering over the past 30 years. He is a fellow of the Institute of Industrial Engineering and has authored nine books and over 150 peer reviewed journal articles.

The book comprises 15 chapters; chapters usually end with a summary, a case study (a fictional high‐tech firm Muddle, Inc) to illustrate the application of concepts covered, and some exercises to help consolidate the learning. The Introductory first Chapter first highlights the importance of manufacturing and then introduces the three primary enemies (complexity, variability, and lack luster leadership) of organizational performance and includes a comprehensive overview of the material in the following chapters.

In Chapter 2, the author first clearly, and convincingly, explains why knowledge of the history of manufacturing is valuable in itself. Then briefly discusses the most important events from ancient times to present day (by relating the advances to history of wars), and explains why Toyota has been able to achieve sustained improved performance.

Chapter 3 covers concepts – and terminology, definitions and notations – necessary to an understanding and appreciation of technical factors (excluding variability) that determine factory performance. It also includes an explanation of the difference between maximum theoretical capacity and sustainable capacity of process steps, machines, work stations or factories. This chapter may put off some readers, as it includes mathematical notations and equations.

Chapters 4 to 9 are related chapters. Chapter 4 provides data and information of a fictitious factory and a link to a website where a simulation model is provided. It gives an opportunity for readers to attempt reducing the cycle time (subject to a budget limitation of $13M) by adding additional machines to one or more of the 12 workstations and/or improving the effectiveness of the process rate. Chapter 5 deals with the concepts of and measurement of variability: variability of arrivals, raw and effective process times, and the relationship between capacity and variability. In Chapter 6, the budget limitation is reduced to $0.50M. However, the reader is allowed to change factory protocols (what the author terms as the third dimension of manufacturing) to reduce variability. Protocols are defined as the practices, policies, and procedures employed in the facility. Chapter 7, using the same model illustrates how overall performance of a factory can be objectively evaluated and compared using the factory operating curve, load‐adjusted cycle‐time efficiency, and factory profit curve. Chapter 8 first introduces good performance metrics (that is, useful, fair, valid and credible); and then discusses some widely used but problematic metrics derived by means of inadequate data sampling rate, which may lead to poor decisions. Finally, it concludes with a discussion on how even “good” metrics may be misused. Chapter 9 summarizes materials presented in the last 8 chapters with a discussion of the methods and models, which helps to focus attention on the materials to follow in the next 5 chapters.

Chapters 10 and 11 concentrate respectively on reduction of complexity and variability in a cost effective way, which provide the basis for a heuristic approach to performance improvement. Chapter 10 discusses issues such as batching, excessive and/or unnecessary inspection steps, disorganized or cluttered work areas, excessive steps in conducting repairs or preventive maintenance, and unclear and ambiguous specifications. Chapter 11 discusses variability in arrival and/or departure times and process‐step effective process times, which are determined by issues such as batch sizes, factory start protocols, Work‐in‐process protocols, and spare‐part and supplies protocols, etc. Chapter 12 uses a revised version of the 12‐workstation factory to illustrate how to maximize profit rather than simply minimize factory cycle time.

Chapter 13 briefly deals with the general capacity or fundamental model of manufacturing, As this requires a knowledge of mathematical modeling and optimization, it may put off some readers. Chapter 14 deals with the crucial role and involvement of members of management at every level, in performance improvement. It also provides recommendations for establishing effective approaches to achieve sustainable significant performance improvements. The final chapter cites the attributes of the ideal factory and summarizes the most promising methods of achieving that.

This is the first book that I have come across where the three enemies of manufacturing (complexity, variability, and poor leadership) are discussed in depth; and examples provided that enable the active reader to appreciate the real world of manufacturing.